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Hewitt CEO sees industry consolidation

GLOBAL – Dale Gifford, chief executive of Hewitt Associates, expects to see further consolidation in the human resources consulting and outsourcing industry in the coming years.

“We continue to feel very positive about our competitive position although we do think some further industry consolidation is likely to be occurring in the coming years,” Gifford told the Robert W. Baird & Co. Business Solutions Conference.

Gifford said the main driver of growth would by human resources business process outsourcing – HR BPO for short.

The firm almost doubled its HR BPO clients in 2005, and the segment currently accounts for around 30% of its total outsourcing revenue.

“But we expect that to be the largest growth driver not only for the industry but for the Hewitt business over the course of the next five to 10 years,” he said – adding that HR BPO was regarded as a ‘start-up’ business within the firm.

Hewitt, which has around 30 clients in the area, has first mover advantage in the “large and growing market” he told the conference.

Last month Hewitt reported a decline in net income and earnings in the fiscal first quarter of 2006.

The firm said net income for the first quarter declined 7% to $31.5m (€26.3m) from $34.0m a year before. Net revenues slipped to $701.0m from $709.0m.

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